Chapter One General Principles
Article 1
To further improve the incentive and restraint mechanism for directors and senior management of Wuxi Xian Dao Intelligent Equipment Co., Ltd. (hereinafter referred to as "the Company"), this system aims to align the compensation of directors and senior management with the company's operational performance and individual achievements, thereby binding their interests with those of the company, promoting sustainable and healthy development, and safeguarding the legitimate rights and interests of shareholders. This system is formulated in accordance with the Company Law of the People's Republic of China, the Guidelines for Corporate Governance of Listed Companies, and other relevant laws and regulations, as well as the Articles of Association of Wuxi Xian Dao Intelligent Equipment Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
This system applies to the following personnel:
- Members of the Board of Directors: independent directors and non-independent directors (including employee representative directors);
- Senior management: the general manager, deputy general managers, board secretary, financial director, and other senior management as stipulated in the Articles of Association.
Article 3
The management of director and senior management compensation follows these principles:
- Transparency, fairness, and openness in compensation standards;
- Compensation levels that match the company's operational performance, long-term interests, and scale;
- Unity of responsibility, authority, and benefits;
- Equal emphasis on incentives and constraints, with a balance of rewards and penalties.
Chapter Two Management Institutions
Article 4
The Compensation and Assessment Committee of the Board of Directors, authorized by the Board, formulates the compensation standards and plans for directors and senior management, reviews their performance, conducts annual assessments, evaluates whether to initiate performance compensation recovery procedures, and supervises the implementation of this system.
Article 5
The compensation plan for directors is reviewed and decided by the shareholders' meeting and disclosed accordingly. When the Board or the Compensation and Assessment Committee evaluates the performance of individual directors and discusses their compensation, the concerned director must abstain.
Article 6
The compensation plan for senior management is reviewed and approved by the Board of Directors and explained to the shareholders' meeting with full disclosure.
Article 7
If the Company incurs losses, it must specifically explain whether changes in the compensation of directors and senior management comply with performance linkage requirements at all stages of the review.